The collaboration, which centers on providing the German automaker with AI foundation models, brain processing units, and specialized engineering services, remains a cornerstone of the Chinese tech firm's growth strategy. However, the anticipated infusion of capital is being weighed against a stark reality: softer demand for new vehicles across China and an increasingly aggressive competitive landscape.
In section Market Quotes
Horizon Robotics Faces Margin Pressure Despite Volkswagen Deal
A strategic partnership with Volkswagen stands to inject billions of yuan into Horizon Robotics' revenue stream over the coming years, yet Daiwa analysts warn that immediate financial gains remain tempered by rising engineering costs and a cooling domestic automotive market that continues to squeeze long-term profitability projections.
Analysts at Daiwa have adjusted their outlook, lowering the company’s 2026 to 2028 revenue forecasts by 6% to 18%. The most significant hit appears in the 2028 profit projection, which has been slashed by 60%. This downward revision stems from the front-loading of essential engineering and validation expenses required to deliver on the Volkswagen contract. Consequently, the firm has lowered its target price for Horizon Robotics shares from HK$10.60 to HK$6.30, though it maintains a buy rating on the stock, which last traded at HK$4.44.
Comments (0)
No comments yet. Be the first!